Small Refinery Exemptions Destroy Demand for Biodiesel

A letter by the National Biodiesel Board asks the Environmental Protection Agency to fully account for small refinery exemptions in the annual Renewable Fuel Standard rules. Specifically, the letter addresses EPA acting administrator Andrew Wheeler, asking him to “end the demand destruction for biodiesel.” The letter asks EPA to set RFS biomass-based diesel volumes for 2020 at 2.8 billion gallons, consistent with the industry’s demonstrated ability to produce fuel.

The National Biodiesel Board says that between 2015 and 2017, the demand destruction for biomass-based diesel is more than 300 million gallons. The letter also thanked Acting Administrator Wheeler for increasing transparency around the agency’s granting of small refinery exemptions. However, the agency’s data dashboard now makes it easy to calculate the biodiesel demand lost to these exemptions, the letter points out.

A recent study says year-round E15 sales will have a limited ethanol market impact according to analysts. President Donald Trump recently announced a directive to move towards year-round E15 sales, and industry analysts say that would have a limited impact on the depressed U.S. ethanol market, with record supplies and prices for the fuel hovering near the lowest in a decade.

There are more than 1,300 stations with pumps that can dispense E15, according to the Renewable Fuels Association. However, that is a small portion of the estimated 122,000 stations in the country, according to the National Association of Convenience Stores. RFA does say the number of stations offering E15 could double to around 2,700 by late 2019 to early 2020. Mark Lytle of Pro Petroleum told Reuters his company would consider adding ethanol tank storage if fueling stations start demanding more of the biofuel. However, due to the uncertainty regarding challenges to the measure, expansions in the short-term are unlikely.